This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

The chocolate maker — one of the four largest in Canada at the time — came forward in July 2007 seeking immunity from prosecution in exchange for co-operating with an investigation, the documents unsealed late Friday reveal.

Lawyers for Cadbury “applied to participate in the bureau’s immunity program in relation to a conspiracy in the chocolate confectionery market,” according to the documents filed in an Ontario Superior Court of Justice (East Region).

The independent law enforcement agency was unaware of the alleged offence before Cadbury Adams came forward, the bureau states in the documents, which were originally filed in 2007 in support of its bid to obtain search warrants as part of its investigation.

Article Continued Below

“Counsel for Cadbury have provided information to the Bureau concerning communications on price issues for chocolate confectionery products between Cadbury and some of its competitors,” the unsealed documents state.

A bureau spokesperson confirmed the contents of the documents Monday.

Cadbury Adams acknowledged last Friday that it had co-operated with the bureau. Sculthorpe declined a request for an interview Monday.

The competition bureau announced Thursday that criminal charges had been laid in a price-fixing case against two leading chocolate manufacturers, Nestlé Canada Inc. and Mars Canada Inc., and a national distributor, Itwal Ltd.

The companies have said they plan to vigorously defend against the allegation. The allegations have not been proved in court.

Three industry executives were also charged, including Robert Leonidas, a former chief executive officer with Nestlé Canada. A lawyer for Leonidas also said he plans to vigorously defend against the allegations.

A fourth company, Hershey Canada Inc., said it would plead guilty to one count of price-fixing related to communications with competitors in 2007.

Article Continued Below

Hershey Canada said it promptly reported the alleged conduct to the Competition Bureau, co-operated fully with its investigation and did not put in place the planned price increase.

Cadbury Adams was not named in the charges. Cadbury, which is now part of Mondelez International, confirmed Friday that it had co-operated with bureau investigators. It declined further comment, citing the fact the case is now before the courts.

Under the bureau’s immunity program, the bureau can recommend a “first-in marker” be granted immunity from prosecution, the unsealed documents explained.

Several current and former employees of Cadbury were named in the application for immunity. They included Sculthorpe, his executive assistant, and 11 other senior executives in the company.

Sculthorpe left Cadbury in October 2007, but continued to co-operate with federal investigators, the documents said.

Other documents filed at the same time were unsealed in December 2007, a month after the competition bureau revealed it had launched an investigation into alleged price-fixing in the chocolate industry.

The earlier documents allege senior executives at Hershey, Mars and Nestlé met secretly in coffee shops and restaurants and at industry conventions to set prices.

The documents allege the chief executive of Nestlé Canada handed envelopes stuffed with pricing information to a competitor, instructing the person not to be seen picking up the material in his office.

The maximum penalties under the act in force at the time the alleged conduct occurred were $10 million and/or five years in prison, the bureau said. The penalties have since been increased to $25 million and/or 14 years in prison.

Class-action lawsuits filed against the companies in connection with the price-fixing allegations resulted in a combined settlement of $23.2 million.

More from The Star & Partners

LOADING

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com